Grayscale Launches Bitcoin ETFs

Grayscale Launches Two Bitcoin ETFs

Grayscale Investments announced the launch of two new exchange-traded funds (ETFs): the Grayscale Bitcoin Covered Call ETF (BTCC) and the Grayscale Bitcoin Premium Income ETF (BPI). These funds aim to provide investors with a differentiated source of income by leveraging Bitcoin's price volatility through covered call writing strategies.

Grayscale Bitcoin Covered Call ETF (BTCC)

The BTCC ETF prioritizes generating current income. Its secondary objective is to track the performance of Bitcoin. This is achieved by writing call options on Bitcoin exchange-traded products (ETPs), including Grayscale's Bitcoin Trust ETF (GBTC) and Mini Trust ETF (BTC). The calls are written near the spot Bitcoin price, aiming to capitalize on Bitcoin's volatility to generate income distributed to shareholders.

Grayscale Bitcoin Premium Income ETF (BPI)

The BPI ETF also focuses on current income generation while maintaining the potential for capital appreciation. It employs a similar strategy of writing call options on BTC ETPs (including GBTC and BTC), but targets strike prices that are significantly out-of-the-money. This approach allows investors to participate in Bitcoin's upside potential while potentially receiving dividend income.

Both ETFs are actively managed, utilize options strategies, and aim for monthly income distributions. The launch follows Grayscale's recent filing to convert its Digital Large Cap Fund into an ETF.

Note: Bitcoin's price has recently seen a surge to as high as $86,000, although market sentiment remains sensitive to various economic factors.

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